About us
At Schroders, asset management is our
only business and our goals are completely
aligned with those of our clients – the
creation of long-term value to assist them in
meeting their future financial requirements.
We manage £313.5 billion on behalf of
institutional and retail investors, financial
institutions and high net worth clients
from around the world, invested in a broad
range of active strategies across equities,
fixed income, multi-asset, alternatives
and real estate.
We employ more than 3,700 talented
people worldwide operating from 38
offices in 28 countries across Europe, Asia,
the Americas, the Middle East and Africa,
close to the markets in which we invest and
close to our clients.
Schroders has developed under stable
ownership for over 200 years and long-term
thinking drives our approach to investing,
building client relationships and growing
our business.
Annual General Meeting
Our Annual General Meeting will be
held at 11.30 a.m. on 28 April 2016
at 31 Gresham Street, London
EC2V 7QA.
Dividend
The Board is recommending
a final dividend of 58.0 pence, payable
on 5 May 2016. This brings the total
dividend payable for the year to
87.0 pence.
Cover image
This has been taken from a Schroders
marketing campaign that denotes our
trusted heritage and advanced thinking.
Highlights
Assets under management
Shareholders’ equity
£313.5bn £2.8bn
(2014: £300.0 billion)
(2014: £2.5 billion)
Net new business
Basic earnings per share
£13.0bn
171.1p
Profit before tax and
exceptional items*
Total dividend per share
£609.7m
87.0p
(2014: £24.8 billion)
(2014: £565.2 million)
Profit before tax
£589.0m
(2014: £517.1 million)
*See note 1(b) on page 103 for details
of exceptional items.
(2014: 152.7 pence)
(2014: 78.0 pence)
Schroders at a glance
We have built
a diversified
business across
client channels,
asset classes
and regions.
We are diverse by:
Clients
Assets
We manage assets on behalf of institutional
and retail investors, financial institutions and
high net worth clients from around the world.
No single client accounts for more than
2 per cent. of revenues.
We invest in a broad range of asset classes
across equities, fixed income, multi-asset,
alternatives and real estate. In addition to
institutional segregated mandates, we
manage more than 590 funds in 19 countries.
Assets under management
Assets under management
Institutional 58%
Equities 42%
Intermediary 32%
Multi-asset 25%
Wealth Management 10%
Fixed Income 19%
Emerging Market Debt,
Commodities and Real Estate 4%
Wealth Management 10%
We have a long-term focus
We take a long-term view as we seek to meet
the firm’s strategic objectives, whether that is
through strengthening client relationships,
investing for organic and inorganic growth,
or finding new ways to innovate to meet the
demands of the future.
Creating enduring client relationships
We seek to build long-term relationships with
our clients and to gain a deep understanding
of their investment objectives.
We have a strong financial position
At 31 December 2015, shareholders’ equity
was £2.8 billion. Maintaining a strong financial
position enables us to take a long-term view
of growth opportunities. We have no debt
and hold capital significantly in excess of
regulatory requirements.
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Schroders | Annual Report and Accounts 2015
Investment capital is the capital held in excess
of operating and regulatory requirements.
It allows us to invest in both organic and
inorganic growth opportunities. Investment
capital increased from £725 million in 2014
to £942 million in 2015.
Strategic report: Overview
Award highlights of 2015
Britain’s Most Admired
Companies 2015/16,
Management Today
CEO of the Decade
2015 Awards for Excellence
in Asset Management,
Financial News
Best International Fund
Group, International Fund
and Product Awards 2015,
Professional Adviser
Domestic clients team
Winner, European Awards
2015, WealthBriefing
Asset Manager of the Year
2015, Better Society
Awards, Charity Times
Geography
We operate from 38 offices in 28 countries,
managing local and international investment
strategies and solutions on behalf of local
and international clients.
Assets under management
Asia Pacific
We generated net inflows in Institutional and
Intermediary of £8.6 billion (2014: £5.4 billion),
across a broad range of fixed income,
multi-asset and equity strategies.
By client domicile
UK 41%
Asia Pacific 25%
Europe, Middle East and Africa 21%
Americas 13%
For more information on Asia Pacific, see page 7.
For more information on the UK, see page 88.
Americas
Growing our presence in the US is a strategic
priority. Challenging market conditions led
to net outflows of £1.3 billion (2014: outflows
of £0.3 billion) in the US, Canada and Latin
America in 2015.
Europe, Middle East and Africa
Demand from intermediary investors
for fixed income, multi-asset and equity
products led to net inflows in Asset
Management in the region of £3.9 billion
(2014: £5.9 billion). In 2015 we established
a presence in South Africa.
For more information on the Americas,
see page 45.
Investing in innovation
We develop investment products and
solutions to meet the changing needs
of our clients. We also invest our own
capital in building a track record in new
investment strategies.
Investment capital
2013
2014
2015
For more information on Europe, Middle East
and Africa, see page 158.
Growing our business
Our focus remains on the long term and
we continue to invest in organic growth
opportunities across the business, while
remaining vigilant of inorganic opportunities.
We have a ‘Highest Standards’ Asset Manager
Rating from the independent ratings agency,
515 Fitch. This is the highest possible rating for
725 an asset manager and recognises our long
942 history, diversified business model and
financial stability.
£m
UK
Strong demand from institutional clients for
fixed income and multi-asset strategies drove
net new business of £1.9 billion in the UK
(2014: £13.8 billion). Our Wealth Management
business in the UK generated net new
business of £0.2 billion (2014: £0.5 billion).
For more information about
our structure see page 16.
For more information about our
business model see page 14.
Schroders | Annual Report and Accounts 2015
3
Chairman’s statement
Board succession
Succession planning has been a long-term
priority for the Board, particularly for the role
of Chief Executive. Michael Dobson will be
succeeded as Chief Executive by Peter
Harrison on 4 April 2016.
We are focused
on delivering
for our clients
and shareholders
over the long
term.
Profit before tax and exceptional items
609.7m
£
(2014: £565.2 million)
Total dividend per share
2011
2012
2013
2014
2015
4
pence per share
Results
2015 was a year of uncertainty for global
markets, which saw the first interest rate rises
in the US since 2006, fears of a Chinese hard
landing and continued pressure on commodity
prices. Despite this, Schroders delivered record
results. Profit before tax and exceptional items
increased 8 per cent. to £609.7 million (2014:
£565.2 million). Our highly diversified business
model led to our winning net new business
of £13.0 billion (2014: £24.8 billion) and assets
under management ended the year at
£313.5 billion (2014: £300.0 billion).
Our policy is to increase dividends
progressively in line with the trend in
profitability. In accordance with our policy,
the Board will recommend to shareholders
at the Annual General Meeting a final
dividend of 58.0 pence (2014: 54.0 pence).
This will bring the total dividend for the year
to 87.0 pence (2014: 78.0 pence), an increase
of 12 per cent. The final dividend will be paid
on 5 May 2016 to shareholders on the register
at 29 March 2016.
39
43
58
78
87
Schroders | Annual Report and Accounts 2015
In Michael Dobson we have been fortunate
to have a truly exceptional Chief Executive lead
the Group for over 14 years. During this time
the Group has weathered financial crises,
turmoil in global markets, increased competition
and an increase in regulatory scrutiny of culture
and conduct within financial services. Against
this backdrop Michael has developed and
maintained a strong, client-focused culture that
is core to Schroders. Under his leadership, the
firm has delivered record results and assets
under management have more than tripled,
generating significant value for shareholders.
On behalf of the Board, I would like to thank
Michael for his enormous contribution to
our success.
Massimo Tosato will retire from the Board
and leave the firm at the end of 2016. Massimo
has also made a significant contribution to the
Group over the past 21 years as head of our
successful Distribution business. He leaves at
the end of the year with our thanks and best
wishes for the future.
We have also had change in our non-executive
Directors. Luc Bertrand retired as Senior
Independent Director following the 2015
Annual General Meeting and was succeeded
by Philip Howard. Luc had been a member of
the Board since 2006 and we benefited greatly
from his experience and expertise. In July
2015, we announced the appointment of
Rhian Davies as a non-executive Director
and member of the Audit and Risk Committee.
Rhian will take over from Ashley Almanza as
Chair of this Committee at the conclusion
of the 2016 Annual General Meeting when
Ashley leaves the Board. We are sorry to
see Ashley leave, but we understand that
his commitments at G4S have made it
increasingly difficult for him to continue
with us.
Strategic report: Overview
Whilst change is inevitable, Schroders thrives
on continuity and stability. The appointment
of Peter Harrison is evidence of our long-term
succession planning and the Board’s desire
to promote someone from within who
understands Schroders’ unique culture. Peter
was the Board’s unanimous choice and we
wish him well as he takes the firm forward.
I will retire from the Board on 4 April 2016
when Michael Dobson will become Chairman.
A Chief Executive becoming Chairman is
unusual in corporate governance terms
and we have consulted with shareholders
and considered the provisions of the UK
Corporate Governance Code in making this
decision. The Board unanimously believes
this is in the best interests of the Company
and its shareholders, with his appointment
ensuring stability and continuity with clients,
shareholders, strategic and commercial
partners and regulators. Philip Howard, our
Senior Independent Director, led the Board’s
deliberations over my successor and Philip
Howard provides more detail on those
deliberations on page 57. I played no part
in choosing my successor, but I am fully
supportive of the decision to appoint Michael.
I have greatly enjoyed being part of Schroders
and it has been a privilege to have led the Board
and to have worked with such a talented
management team. Over the years I have met
many employees across the world and I have
always been struck by their enthusiasm, talent
and, most importantly, the pride they have in
working for Schroders and doing the right thing
for clients, the firm and shareholders. At a time
when regulators and commentators are
questioning corporate culture and how boards
can embed an appropriate culture across a
diverse business, I can say with confidence
that the right culture is well and truly embedded
within this firm. This is a unique organisation that
always strives to do the right thing. I am sure our
clients, employees and shareholders will be
reassured that this approach will continue.
Our people are our most important asset
and retaining talent is a key strategic
objective. For more details on how we
train and develop our employees and
our approach to diversity, see page 22.
Our newly-formed Data Insights
team focuses on developments in
data analytics to complement the
traditional research of our investment
professionals. For more on the team’s
work, see page 27.
Working with almost 800 charities,
foundations and endowments, we are
the largest investment manager of charity
assets in the UK. For more on our work in
this sector, see page 35.
Our Board has continued to evolve
through 2015. For more details on our
Board members, see page 46.
Andrew Beeson
Chairman
Schroders | Annual Report and Accounts 2015
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